☕️ Good morning comrades,

We’re closing out the week with yet another creation from China’s gourmet hell: stinky tofu coffee. Above all, it underscores one thing: innovation is taken very seriously here.
Speaking of innovation: China holds 60 % of the world’s AI patents (and 99 % of the weird-food patents).

🔢 Facts & Figures

2.2 Million

The number of people in Japan who entered the lottery on launch day for a Nintendo Switch 2.

75 Billion USD

The revenue of Cambodia’s online scam centers, which are predominantly controlled by Chinese syndicates.

3.4 Trillion kWh

The amount of renewable energy China generated in 2024, accounting for roughly 35 % of its total electricity production.

🚀 Benchmarks

Top Bit: 📞 Trump & Xi Talk Trade Again

For the first time since the new trade conflict began, U.S. President Donald Trump and China’s head of state Xi Jinping spoke directly by phone. Both sides agreed to hold new talks aimed at curbing the escalation around tariffs and export bans—especially concerning rare earths.

Details

📞 1.5-hour call: The conversation focused almost exclusively on trade issues; according to Trump, neither Russia nor Iran were discussed.

🔋 Rare earths in focus: Trump wrote that nobody should “doubt the complexity of rare earth products” any longer.

🕊️ Invitations exchanged: Xi extended a fresh invitation to Trump to visit China, and Trump reciprocated with an invite to Washington.

⚠️ Taiwan: Xi urged the U.S. to exercise caution on Taiwan matters but emphasized China’s willingness to cooperate.

Why it matters

• Signal of détente: After weeks of radio silence, the call marks an initial step toward de-escalation.

• Tipping point: The trade war is far from resolved—Trump accuses China of breaking agreements, and China threatens retaliation. Both sides must forge further accords, with negotiation teams set to engage soon.

• Wide industry impact: Export bans on rare earths hit global supply chains in the auto, chip, and defense sectors.

Background

In May, a 90-day moratorium on punitive tariffs was agreed upon, but implementation has since stalled. The U.S. accuses China of delaying export licenses, while China criticizes U.S. sanctions against chipmakers. This renewed dialogue comes at a time when the EU is also taking on a more active role in the trade conflict with China.

Further Reading: CNA, SCMP

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Head Of The Day

Wang Ning

This 38-year-old wunderkind has quite literally played his way into the top 100 richest people in China. His company, Pop-Mart, sells “blind boxes” filled with collectible toys. The breakout hit plush is called Labubu. In the first half of 2024, that quirky little toy generated ¥6.3 billion CNY (about $870 million USD) in revenue for Pop-Mart.

Market Bit: 🚀 RedNote Valuation Climbs to $26 Billion

Details

💹 Valuation boost: RedNote (Xiaohongshu) recently hit a corporate valuation of roughly $26 billion via a secondary-market deal—30 % higher than the previously cited $20 billion. This new valuation is based on the net asset value of a GSR Ventures fund, in which RedNote makes up 91 % of the assets.

📈 User growth & monetization: Since its 2013 founding, RedNote has evolved from a pure lifestyle community into a platform with over 400 million monthly active users. By combining user-generated reviews, influencer partnerships, and an integrated marketplace, both advertising and e-commerce revenues have surged.

🏆 TikTok competition: With potential TikTok restrictions looming in the U.S., RedNote is benefiting from increased interest among Western investors. At the same time, the Chinese government has reaffirmed its support for tech firms, paving the way for further capital inflows.

Why it matters

• IPO potential: A $26 billion valuation fuels speculation about an imminent IPO—possibly as early as late 2025 in Hong Kong or U.S. markets. A successful listing could establish RedNote as a blueprint for other Chinese startups.
  

• Innovation pressure: RedNote’s hybrid content-and-commerce model forces competitors like Kuaishou and Bilibili to accelerate their own e-commerce initiatives.
  

• Sector signal: This rally sends a strong message to China’s tech sector: state support plus robust monetization can still drive peak valuations in crowded markets, potentially sparking further M&A activity.

Further reading: Bloomberg, SCMP

Top Reads

🇰🇵 Kim Jong Un Pledges “Unconditional Support” to Russia in Ukraine War: At a meeting with Defense Minister Sergei Shoigu, Kim Jong Un affirmed that Pyongyang stands with Moscow on all international issues—especially in Ukraine. Thousands of North Korean soldiers have been deployed in Russia for months, with around 600 casualties so far, and North Korea has supplied weapons to Russia. The two countries plan to deepen their ties even further. More on this.

🚀 China’s Smart-Mobility Firms Set Their Sights on Hong Kong: Chery Automobile is planning a $1.5 billion USD IPO to fund new EV models and overseas expansion. Seres Group, Huawei’s EV partner, is also raising fresh capital to accelerate growth. Pony AI and Hesai have confidentially filed to go public, aiming to scale their autonomous-driving and sensor solutions. Backed by CATL’s mega-IPO, Hong Kong could raise over 160 billion HKD in 2025 for China’s mobility champions. More on this.

🇰🇷 South Korea’s New President Lee Races into Economic Crisis: Lee Jae-myung convened his first cabinet meeting to draft a stimulus package combating sluggish growth and rising living costs. He announced ₩30 trillion Won (≈ $22 billion USD) in additional spending to boost the economy. Meanwhile, he’s racing to fill vacant government posts after many offices were still empty—and even cleared out. His biggest challenge will be offsetting U.S. tariffs and restoring public trust after a martial-law controversy. More on this.

Optional Reads

Sichuan: Extended wedding leave to 25 days and maternity leave to 150 days in an effort to raise birth rates. More on this.

Wantai Bio: China’s first nine-valent HPV vaccine “Xinkening 9” receives approval. More on this.

Citigroup: Cuts 3,500 tech-support jobs in China to trim costs. More on this.

🥠 Fortune Cookie of The Day

🦷 Two things are undisputed: The Chinese work hard and they’re creative. Oh, and thirdly, you can buy literally anything on Taobao. A young woman from southeastern Fujian Province took all three points to the extreme. She was “too busy” to see a dentist, so she bought a DIY dental implant kit online (about $3.90) and tried to fix herself.
The result? The implant sealed off her mouth entirely. In a marathon session, a professional dentist had to come to the rescue. Whether it’s a DIY implant or stinky tofu, asiabits always says: For risks and side effects, read the fine print and ask your doctor or pharmacist.

See you tomorrow,

Thomas, Michael & the Team of asiabits.

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